The largest blaze has a 190-mile front and is burning near Lithgow, a town in the Blue Mountains which is a two-hour drive from Sydney.

One firefighter said that if the three fires did merge, the resulting blaze would be a "major catastrophe," and far more difficult to control than the current situation.

The fires have so far destroyed more than 200 homes and killed one person. Fire officials are considering mandatory evacuations in some 25 townships.

The fires have also created dramatic scenes in the skies over Sydney, with some of Australia's most famous landmarks framed by black smoke and a red glow from the horizon.

The task ahead for the New South Wales Fire Service looked to be even harder Monday with news that thunderstorms forecast through the week would not bring as much rain as first thought.

NSW Rural Fire Service Commissioner Shane Fitzsimmons told a press conference: "Most of the thunderstorm activity will be unaccompanied by moisture.

Firefighters monitor a back burn near Mount Victoria in the Blue Mountains on Monday.

"There are some reports of rain but it has not been extensive, and the potential for rain on Tuesday evening has gone.

"We are being told to expect 2 mm at best, which is inconsequential in terms of a fire-fighting effort."

Some 2,000 firefighters were on the ground dealing with around 58 blazes in total, 14 of which were out of control. Full-time and volunteer firefighters have been drafted in from across Australia, with the possibility of reinforcements arriving from as far as New Zealand, Fitzsimmons said.

"Modeling indicates that there's every likelihood under the forecast weather conditions that [two of the three fires], particularly up in the back end of the mountains will merge at some point," Fitzsimmons told BBC News. "There is every likelihood that these two fires will join up.

He said a "worst-case scenario" was that these two fires could join up with another one at Springwood.

Mark O'Carrigan, a volunteer firefighter for 15 years who has lived in the area all his life, said this outcome would make the challenge ahead far more daunting.

"I have seen the fire maps coming through," he said in a live interview with Sky news. "Having lived in this area all my life, I can say that [the three fires joining up] could possibly happen.

Burnt out cars sit in front of a destroyed house in Mount Victoria in the Blue Mountains on Monday.

"If it does happen it would a major catastrophe. What is in the background here would be nothing," he added, referring to the blaze on camera behind him.

Officials said temperatures in the fire zone on Sunday exceeded 77 degrees Fahrenheit, winds reached 12 miles per hour and humidity dropped to 30 percent.

New South Wales Premier Barry O'Farrell on Sunday told reporters in Sydney: "A declaration of emergency gives the emergency services additional powers to deal with whatever eventualities may arise.

"We hope that won't matter. But these powers include the right to order the public to leave or to enter an area, the right to shore up or demolish a building and of course, it also prevents people from disobeying an order given under these powers."

Options Action

The Reserve Bank of Australia indicates that it could put rates on hold for the time being and will only opt for further rate cuts, if necessary, says Sean Callow, senior currency strategist at Westpac.